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Which? contactless payments warning

Written by: Emma Lunn
Freezing your debit or credit card when it’s lost or stolen won’t necessarily stop all transactions going through.

More banks are offering cardholders the option to ‘freeze’ their card, as an alternative to cancelling it altogether, if they lose it. But Which? has warned that while freezing your card will block most payments, some contactless payments could still be processed.

If your contactless credit or debit card is lost or stolen, you have two options. The first is to cancel your card, which will make it invalid. Your card will be replaced with a new card with a different number.

The alternative is to freeze your card, which will put a temporary block on payments. This can be particularly helpful if you’re not sure whether your card is lost, stolen or simply misplaced.

Which? says that in theory, both options should immediately stop any payments from being authorised on your card. However, in reality, some transactions could still be made if you freeze your card.

What is an offline payment?

The type of payment that can still be made is known as an “offline transaction”.

During an online transaction, the card machine that takes your payment immediately checks with your bank that you have enough money in your account. If your card has been cancelled or frozen, the payment won’t be authorised.

But offline payments occur when your bank account isn’t automatically checked at the point of making a transaction. This means that the payment machine won’t be told that your card isn’t authorised and will allow the payment to go ahead.

Which? said: “Contactless cards are particularly at risk of being used despite a freeze being in place, because you don’t always need to enter your PIN to make a payment. The issue lies with the payment providers, namely Amex, Mastercard and Visa.

“Each payment provider sets a payment threshold (called a floor limit) at which point cards are forced to go online for authorisation – but below this limit, offline transactions could continue to slip through.”

A small number of companies regularly use offline payments. This is usually so they can offer you a service before calculating the amount of money you should be charged. For example, Transport for London fares are processed offline as the price you pay depends on the number of journeys you make and is calculated at the end of the day.

Mastercard told Which? about 1 per cent of contactless transactions in the UK remain offline and are mainly for Transport for London and other transport services with variable pricing.

What to do if you spot unauthorised transactions?

If you freeze your bank card you should still check your account for transactions you don’t recognise, especially if you live somewhere where contactless payments are used on public transport.

If your card is definitely lost or stolen, you might be better off cancelling it altogether, rather than relying on freezing it.

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